Long-term-lease for Mr Chips

3:28 PM Friday September 8, 2017 True Commercial

The site at 100 Kerwyn Ave, East Tamaki – indicated by red border - has long accommodated Mr Chips main production and distribution facility. Photo / Supplied

The East Tamaki home to frozen potato chip maker Mr Chips is for sale, with a lease in place to the company through until late 2031.

The 2.617ha site, at 100 Kerwyn Ave, has 9339sq m of mostly food-grade buildings, having accommodated Mr Chips Ltd’s main production and distribution facility for almost two decades.

Featured in Bayleys’ latest Total Property portfolio, the property is for sale by negotiation through Shane Snijder and Dave Stanley of Bayleys South Auckland.

The company signed a new 15-year-lease from December 1 last year, with one six-year right of renewal, says Snijder.

The lease is earning net annual rent of $1,135,590 with fixed annual rental increases of two per cent per annum.

“In addition to the very long lease with built-in rental grown to a popular Kiwi brand, this is also a strongly-located, substantial landholding in the heart of the growing East Tamaki industrial precinct,” says Snijder.

“The property is close to Highbrook Drive and is conveniently placed for easy access to the Southern Motorway.”

The property has three main buildings: a receiving and grading facility for potatoes with a two-level office and administration area at the front; and two manufacturing and storage buildings with close to 3000sq m of freezer and chiller facilities.

“New plant added since the turn of the century has doubled capacity and set up the company for future growth,” Snijder says.

“The tenancy’s triple net lease structure means the occupant is responsible for all outgoings and the cooling and refrigeration equipment which the purchaser will have no maintenance obligations or exposure to.”

Mr Chips began as a small manufacturer of frozen potato chips over 30 years ago and has steadily grown since then.

It now has substantial distribution networks throughout New Zealand, Australia and the South Pacific.

More than half of the company’s production is exported and it is has recently launched into Asia, customising its offering for the specific requirements of that market.

Its product range has also expanded from the classic 13mm fry to a range of cuts (including crinkle cut, steak cut and shoestring chips) as well as potato wedges and a range of kumara chips.

The company was listed on the New Zealand stock exchange before being privatised in 2008.

In 2013, it was purchased by Pukekohe based Balle Bros Group, a substantial fully-integrated vegetable business encompassing growing, packing, marketing and distributing a wide range of products.

“Balle Bros supplies potatoes for the property’s chip production so there is a good fit between these two long established and successful businesses,” says Snijder.

Stanley says the property benefits from huge road frontage to Kerwyn Ave, and is in a high-profile position on one of East Tamaki’s main arterial routes opposite the intersection with Ra Ora Drive, which connects with Highbroook Drive. “The ongoing expansion of the nearby Highbrook Business Park and new interchange at Otahuhu has continued to advance the already rapid development of East Tamaki and increased its popularity as a business location.”

Stanley says the property is well located in relation to both labour and transport, with substantial labour pools available from suburbs extending from Pakuranga to Otara.

“The Highbrook Drive State Highway 1 interchange positioned to the west of the property provides a link to the port, CBD and other business areas such as Mt Wellington to the north.

To the south, the intersection with the Southwestern motorway at Manukau provides easy access to the airport and an alternative route north to Albany now that the Waterview tunnel is open.”